Question

Each month cameron budgets $1040 for fixed expenses $980 for living expenses and $120 for annual expenses his annual net income is $24,132. Which statement best describes his monthly budget?

A. It shows a deficit of $129
B. it shows a surpus of $129
C. It shows a deficit of $9
D. it is Balanced

Answer 1

Let us first find how much he is spending every year, to do this let's find his monthly expense and multiply it by 12.


Every month Cameron spends 1040 + 980 + 120 = 2140

To find out how much he spends yearly, multiply the monthly value by 12,
2140 x 12 = 25680


This value is more than his net income so he clearly has a surplus, but to check we can subtract 129 from every month to get:

(1040 + 980 + 120 - 129) = 2011

2011 x 12 = 24132, which shows that his budget is saving 129 surplus every month. Choice B is correct.

Answer 2

Answer: Option 'A' is correct.

Explanation:

Since we have given that

Fixed expenses = $1040

Living expenses = $980

Annual expenses = $120

So, Total expenditure would be

`\$1040+\$980+\$120\\\\=\$2140`

Annual net income = $24,132

Monthly income(receipt) would be

`(24132)/(12)=\$2011`

Since we can see that total expenditure is more than total receipts.

So, there will be deficit.

Deficit = Total expenditure - Total receipt

Deficit = $2140-$2011

Deficit = $129

Hence, there is a deficit of $129.

Thus, option 'A' is correct.